Fraud Squad head: Financial institutions holding up investigations

PORT of Spain South MP Keith Scotland was shocked that for the last three years, 80 per cent of police investigations into fraud perpetrators against the customers of financial institutions have not been completed.

He was also shocked that part of the reason for this appears to be a lack of co-operation with the police by some of these institutions.

Scotland raised his concerns during a public inquiry by the Parliament’s Finance and Legal Affairs Joint Select Committee on March 22 with the police and officials from the Central Bank and the Financial Intelligence Unit (FIU).

Scotland asked why so many investigations had not been completed between 2020 and 2023. FIU director Nigel Stoddard attributed this in part to financial institutions doing due diligence on these matters.

Scotland was not satisfied by this response
“Why is it taking so long? 80 per cent? Three years?”

Fraud Squad Snr Supt Arlet Groome told JSC members, “As it relates to fraud investigations, there are a number of stoppages that we (police) have no control over.”

He cited the challenge of suspects and stolen money going to countries where Trinidad and Tobago has no mutual legal assistance treaty, such as Kuwait and Panama.

In the absence of a treaty in these situations, Groome said, “It (investigation) stops there.”

He told committee members the Director of Public Prosecutions (DPP) often issues advice to financial institutions to provide the police with information pertinent to investigations into fraudulent activities believed to have been committed at their institutions.

Groome said, “When we reach the financial institutions, there lies the problem. We have a lengthy waiting period."
That waiting period, he continued, could be from three months to a year.”

Groome said even when information is received, it may not be of a quality the police can turn into evidence to support charges against offenders.

Scotland said, “That is unacceptable. The more time you allow to go, is the more time you allow for the perpetrators to either cover their tracks or go to Kuwait.”

Groome replied, “But there is no legislation to force them or force anyone to give us statements that we would have gotten by warrants or production orders.”

He said the police would welcome any legislative amendment which would force financial institutions to provide information to them relative to fraud investigations.

Scotland was concerned by reports the JSC had received that financial institutions were not being co-operative with police investigations into fraud cases that concern them.

“Say it isn’t so.”

Groome said not all financial institutions have been unco-operative with the police on these matters.

Opposition Senator Jayanti Lutchmedial-Ramdial was concerned there could be pushback from financial institutions against fraud investigations by the police.

Scotland told Groome, “Complain to the Central Bank. Let the Central Bank intervene and put some turpentine (on the financial institutions).”

He looked at the Central Bank officials and asked, “What is your solution to that problem?”

The bank’s anti-money laundering manager Nadira Rahamatula-Rajack said financial institutions are supposed to comply with orders as described by Groome. She added those orders “carry a time limit stipulated in law under the Proceeds of Crime Act in respect of money-laundering investigations.”

Deputy Inspector of Financial Institutions Michelle Francis-Pantor said the bank will have discussions with the Bankers Association to determine solutions to the problems identified by Scotland.

Lutchmedial-Ramdial suggested the police provide both the JSC and the Central Bank with information on the number of fraud investigations related to financial institutions that remain outstanding. She reminded them, “The conversion of intelligence to evidence is a significant step in bringing anybody to justice.”

Scotland gave them another reminder.
“No institution is a law unto itself in this country.”

Earlier in the meeting, Groome said financial scams were hidden crimes and the victims never receive justice in most of these cases.

Lutchmedial-Ramdial, recalled an incident in 2018 when a sum of money was taken out of her bank account from a transaction done in a casino in Woodbrook. She said the bank refunded the stolen money in that instance.

Groome said a major challenge in arresting and charging the perpetrators of these crimes is the inability to put a face to the perpetrator using any kind of visual recognition.

Fraud Squad Insp Tricia Smith told committee members about other fraudsters who engage in material or property fraud.

The former deals with victims being asked to pay for construction materials but no materials are ever delivered. Government Senator Laurence Hislop expressed relief when he told participants he recently engaged in such a transaction but received the materials he paid for.

On the latter, Smith said there were 71 reports of this type of fraud between 2020 and 2023, with a monetary value over $12 million.

She added the challenge is “looking for a nameless almost faceless person who came in, did this transaction and then has disappeared.”

But Smith said the police have arrested and charged some people involved in this crime. She promised to provide the JSC with this information.

Financial Services Ombudsman Dominic Stoddard said the Central Bank continues to educate people on financial fraud through its financial literacy programme.

Scotland said this was important as people needed to know whether to invest their money in a financial institution or hide it under their mattress.

He also said the bank should try to educate people on as many financial issues as it could.